PBOC drains 175b yuan in market operations
Updated: 2008-03-11 21:00
BEIJING -- The People's Bank of China (PBOC) on Tuesday drained 175 billion yuan (24.6 billion US dollars) from the interbank market through central bank bill issues and repurchase transactions.
The PBOC issued 75 billion yuan of one-year bills with a yield of 4.0583 percent, flat from last week. It also conducted 100 billion yuan of 28-day repos at a yield of 3.20 percent, also flat from last week.
Analysts said the central bank was using more open market operations to absorb excess liquidity as the interest rates cut in the United States had left it a more difficult choice to raise the rates.
On Thursday, the PBOC soaked up 275 billion yuan by issuing three-month and three-year central bank bills and conducting the 28-day repos.
The large size of open market operations were sending the market clear signals of further efforts to curb the inflation that surged to the almost 12-year high of 8.7 percent in February.
M2, the broader measure of money supply, which covers cash in circulation plus all deposits, rose 18.94 percent in January, 2.22 percentage points higher than a month earlier, according to the PBOC.
It also said new renminbi loans in January surged to a record high of 803.6 billion yuan, up 237.3 billion yuan from a year earlier.
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